EN BANC

April 24, 2012 Case

R E S O L U T I O N

VELASCO, JR., J .:


Before the Court are the Motion to Clarify and Reconsider Resolution of
November 22, 2011 dated December 16, 2011 filed by petitioner Hacienda Luisita,
Inc. (HLI) and the Motion for Reconsideration/Clarification dated December 9,
2011 filed by private respondents Noel Mallari, Julio Suniga, Supervisory Group
of Hacienda Luisita, Inc. and Windsor Andaya (collectively referred to as Mallari,
et al.).

In Our July 5, 2011 Decision
[2]
in the above-captioned case, this Court
denied the petition for review filed by HLI and affirmed the assailed Presidential
Agrarian Reform Council (PARC) Resolution No. 2005-32-01 dated December 22,
2005 and PARC Resolution No. 2006-34-01 dated May 3, 2006 with the
modification that the original 6,296 qualified farmworker-beneficiaries of
Hacienda Luisita (FWBs) shall have the option to remain as stockholders of HLI.

Upon separate motions of the parties for reconsideration, the Court, by
Resolution
[3]
of November 22, 2011, recalled and set aside the option thus granted
to the original FWBs to remain as stockholders of HLI, while maintaining that all
the benefits and homelots received by all the FWBs shall be respected with no
obligation to refund or return them.

HLI invokes the following grounds in support of its instant Motion to Clarify
and Reconsider Resolution of November 22, 2011 dated December 16, 2011:

A

WITH DUE RESPECT, THE HONORABLE COURT ERRED IN
RULING THAT IN DETERMINING THE JUST COMPENSATION,
THE DATE OF TAKING IS NOVEMBER 21, 1989, WHEN PARC
APPROVED HLIs SDP [STOCK DISPTRIBUTION PLAN] IN
VIEW OF THE FACT THAT THIS IS THE TIME THAT THE FWBs
WERE CONSIDERED TO OWN AND POSSESS THE
AGRICULTURAL LANDS IN HACIENDA LUISITA BECAUSE:

(1) THE SDP IS PRECISELY A MODALITY WHICH THE
AGRARIAN LAW GIVES THE LANDOWNER AS ALTERNATIVE
TO COMPULSORY COVERAGE IN WHICH CASE, THEREFORE,
THE FWBs CANNOT BE CONSIDERED AS OWNERS AND
POSSESSORS OF THE AGRICULTURAL LANDS AT THE TIME
THE SDP WAS APPROVED BY PARC;

(2) THE APPROVAL OF THE SDP CANNOT BE AKIN TO A
NOTICE OF COVERAGE IN COMPULSORY COVERAGE OR
ACQUISITION BECAUSE SDP AND COMPULSORY COVERAGE
ARE TWO DIFFERENT MODALITIES WITH INDEPENDENT AND
SEPARATE RULES AND MECHANISMS;

(3) THE NOTICE OF COVERAGE OF JANUARY 02, 2006 MAY, AT
THE VERY LEAST, BE CONSIDERED AS THE TIME WHEN THE
FWBs CAN BE CONSIDERED TO OWN AND POSSESS THE
AGRICULTURAL LANDS OF HACIENDA LUISITA BECAUSE
THAT IS THE ONLY TIME WHEN HACIENDA LUISITA WAS
PLACED UNDER COMPULSORY ACQUISITION IN VIEW OF
FAILURE OF HLI TO PERFORM CERTAIN OBLIGATIONS OF
THE SDP, OR SDOA [STOCK DISTRIBUTION OPTION
AGREEMENT];

(4) INDEED, THE IMMUTABLE RULE AND THE UNBENDING
JURISPRUDENCE IS THAT TAKING TAKES PLACE WHEN THE
OWNER IS ACTUALLY DEPRIVED OR DISPOSSESSED OF HIS
PROPERTY;

(5) TO INSIST THAT THE TAKING IS WHEN THE SDP WAS
APPROVED BY PARC ON NOVEMBER 21, 1989 AND THAT THE
SAME BE CONSIDERED AS THE RECKONING PERIOD TO
DETERMINE THE JUST COMPENSATION IS DEPRIVATION OF
LANDOWNERS PROPERTY WITHOUT DUE PROCESS OF LAW;

(6) HLI SHOULD BE ENTITLED TO PAYMENT OF INTEREST ON
THE JUST COMPENSATION.

B

WITH DUE RESPECT, THE HONORABLE COURT ERRED WHEN
IT REVERSED ITS DECISION GIVING THE FWBs THE OPTION
TO REMAIN AS HLI STOCKHOLDERS OR NOT, BECAUSE:

(1) IT IS AN EXERCISE OF A RIGHT OF THE FWB WHICH THE
HONORABLE COURT HAS DECLARED IN ITS DECISION AND
EVEN IN ITS RESOLUTION AND THAT HAS TO BE RESPECTED
AND IMPLEMENTED;

(2) NEITHER THE CONSTITUTION NOR THE CARL
[COMPREHENSIVE AGRARIAN REFORM LAW] REQUIRES
THAT THE FWBs SHOULD HAVE CONTROL OVER THE
AGRICULTURAL LANDS;

(3) THE OPTION HAS NOT BEEN SHOWN TO BE DETRIMENTAL
BUT INSTEAD BENEFICIAL TO THE FWBs AS FOUND BY THE
HONORABLE COURT.

C

WITH DUE RESPECT, THE HONORABLE COURT ERRED IN
RULING THAT THE PROCEEDS FROM THE SALES OF THE 500-
HECTARE CONVERTED LOT AND THE 80.51-HECTARE SCTEX
CANNOT BE RETAINED BY HLI BUT RETURNED TO THE FWBs
AS BY SUCH MANNER; HLI IS USING THE CORPORATION
CODE TO AVOID ITS LIABILITY TO THE FWBs FOR THE PRICE
IT RECEIVED FROM THE SALES, BECAUSE:

(1) THE PROCEEDS OF THE SALES BELONG TO THE
CORPORATION AND NOT TO EITHER HLI/TADECO OR THE
FWBs, BOTH OF WHICH ARE STOCKHOLDERS ENTITLED TO
THE EARNINGS OF THE CORPORATION AND TO THE NET
ASSETS UPON LIQUIDATION;

(2) TO ALLOW THE RETURN OF THE PROCEEDS OF THE SALES
TO FWBs IS TO IMPOSE ALL LIABILITIES OF THE
CORPORATION ON HLI/TADECO WHICH IS UNFAIR AND
VIOLATIVE OF THE CORPORATION CODE.


Mallari, et al. similarly put forth the following issues in its Motion for
Reconsideration/Clarification dated December 9, 2011:

I
REPUBLIC ACT NO. 6657 [RA 6657] OR THE COMPREHENSIVE
AGRARIAN REFORM LAW [CARL] DOES NOT PROVIDE THAT
THE FWBs WHO OPT FOR STOCK DISTRIBUTION OPTION
SHOULD RETAIN MAJORITY SHAREHOLDING OF THE
COMPANY TO WHICH THE AGRICULTURAL LAND WAS
GIVEN.

II
IF THE NOVEMBER 22, 2011 DECISION OF THIS HONORABLE
COURT ORDERING LAND DISTRIBUTION WOULD BE
FOLLOWED, THIS WOULD CAUSE MORE HARM THAN GOOD
TO THE LIVES OF THOSE PEOPLE LIVING IN THE HACIENDA,
AND MORE PARTICULARLY TO THE WELFARE OF THE FWBs.

III
ON THE CONCLUSION BY THIS HONORABLE COURT THAT
THE OPERATIVE FACT DOCTRINE IS APPLICABLE TO THE
CASE AT BAR, THEN FWBs WHO MERELY RELIED ON THE
PARC APPROVAL SHOULD NOT BE PREJUDICED BY ITS
SUBSEQUENT NULLIFICATION.

IV
THOSE WHO CHOOSE LAND SHOULD RETURN WHATEVER
THEY GOT FROM THE SDOA [STOCK DISTRIBUTION OPTION
AGREEMENT] AND TURN OVER THE SAME TO HLI FOR USE IN
THE OPERATIONS OF THE COMPANY, WHICH IN TURN WILL
REDOUND TO THE BENEFIT OF THOSE WHO WILL OPT TO
STAY WITH THE SDO.

V
FOR THOSE WHO CHOOSE LAND, THE TIME OF TAKING FOR
PURPOSES OF JUST COMPENSATION SHOULD BE AT THE
TIME HLI WAS DISPOSSESSED OF CONTROL OVER THE
PROPERTY, AND THAT PAYMENT BY [THE GOVERNMENT] OF
THE LAND SHOULD BE TURNED OVER TO HLI FOR THE
BENEFIT AND USE OF THE COMPANYS OPERATIONS THAT
WILL, IN TURN, REDOUND TO THE BENEFIT OF FWBs WHO
WILL OPT TO STAY WITH THE COMPANY.


Basically, the issues raised by HLI and Mallari, et al. boil down to the
following: (1) determination of the date of taking; (2) propriety of the revocation
of the option on the part of the original FWBs to remain as stockholders of HLI;
(3) propriety of distributing to the qualified FWBs the proceeds from the sale of
the converted land and of the 80.51-hectare Subic-Clark-Tarlac Expressway
(SCTEX ) land; and (4) just compensation for the homelots given to the FWBs.

Payment of just compensation

HLI contends that since the SDP is a modality which the agrarian reform law
gives the landowner as alternative to compulsory coverage, then the FWBs cannot
be considered as owners and possessors of the agricultural lands of Hacienda
Luisita at the time the SDP was approved by PARC.
[4]
It further claims that the
approval of the SDP is not akin to a Notice of Coverage in compulsory coverage
situations because stock distribution option and compulsory acquisition are two (2)
different modalities with independent and separate rules and
mechanisms. Concomitantly, HLI maintains that the Notice of Coverage issued on
January 2, 2006 may, at the very least, be considered as the date of taking as this
was the only time that the agricultural lands of Hacienda Luisita were placed under
compulsory acquisition in view of its failure to perform certain obligations under
the SDP.
[5]


Mallari, et al. are of a similar view. They contend that Tarlac Development
Corporation (Tadeco), having as it were majority control over HLI, was never
deprived of the use and benefit of the agricultural lands of Hacienda Luisita. Upon
this premise, Mallari, et al. claim the date of taking could not be at the time of
the approval of the SDP.
[6]


A view has also been advanced that the date of the taking should be left to
the determination of the Department of Agrarian Reform (DAR) in conjunction
with its authority to preliminarily determine the just compensation for the land
made subject of CARP.

Alyansa ng mga Manggagawang Bukid sa Hacienda Luisita (AMBALA), in
its Comment/Opposition (to the Motion to Clarify and Reconsider Resolution of
November 22, 2011) dated January 30, 2012, on the other hand, alleges that HLI
should not be paid just compensation altogether.
[7]
It argues that when the Court of
Appeals (CA) dismissed the case
[8]
the government of then President Ferdinand E.
Marcos initially instituted and won against Tadeco, the CA allegedly imposed as a
condition for its dismissal of the action that should the stock distribution program
fail, the lands should be distributed to the FWBs, with Tadeco receiving by way of
compensation only the amount of PhP 3,988,000.
[9]


AMBALA further contends that if HLI or Tadeco is, at all, entitled to just
compensation, the taking should be reckoned as of November 21, 1989, the date
when the SDP was approved, and the amount of compensation should be PhP
40,000 per hectare as this was the same value declared in 1989 by Tadeco to
ensure that the FWBs will not control the majority stockholdings in HLI.
[10]

At the outset, it should be noted that Section 2, Rule 52 of the Rules of
Court states, No second motion for reconsideration of a judgment or final
resolution by the same party shall be entertained. A second motion for
reconsideration, as a rule, is prohibited for being a mere reiteration of the issues
assigned and the arguments raised by the parties.
[11]


In the instant case, the issue on just compensation and the grounds HLI and
Mallari, et al. rely upon in support of their respective stance on the matter had been
previously raised by them in their first motion for reconsideration and fully passed
upon by the Court in its November 22, 2011 Resolution. The similarities in the
issues then and now presented and the grounds invoked are at once easily
discernible from a perusal of the November 22, 2011 Resolution, the pertinent
portions of which read:

In Our July 5, 2011 Decision, We stated that HLI shall be paid
just compensation for the remaining agricultural land that will be
transferred to DAR for land distribution to the FWBs. We also ruled
that the date of the taking is November 21, 1989, when PARC
approved HLIs SDP per PARC Resolution No. 89-12-2.

In its Motion for Clarification and Partial Reconsideration, HLI
disagrees with the foregoing ruling and contends that the taking should
be reckoned from finality of the Decision of this Court, or at the very
least, the reckoning period may be tacked to January 2, 2006, the date
when the Notice of Coverage was issued by the DAR pursuant to PARC
Resolution No. 2006-34-01 recalling/revoking the approval of the SDP.

For their part, Mallari, et al. argue that the valuation of the land
cannot be based on November 21, 1989, the date of approval of the SDP.
Instead, they aver that the date of taking for valuation purposes is a
factual issue best left to the determination of the trial courts.

At the other end of the spectrum, AMBALA alleges that HLI
should no longer be paid just compensation for the agricultural land that
will be distributed to the FWBs, since the Manila Regional Trial Court
(RTC) already rendered a decision ordering the Cojuangcos to transfer
the control of Hacienda Luisita to the Ministry of Agrarian Reform,
which will distribute the land to small farmers after compensating the
landowners P3.988 million. In the event, however, that this Court will
rule that HLI is indeed entitled to compensation, AMBALA contends
that it should be pegged at forty thousand pesos (PhP 40,000) per
hectare, since this was the same value that Tadeco declared in 1989 to
make sure that the farmers will not own the majority of its stocks.

Despite the above propositions, We maintain that the date of
taking is November 21, 1989, the date when PARC approved HLIs
SDP per PARC Resolution No. 89-12-2, in view of the fact that this is
the time that the FWBs were considered to own and possess the
agricultural lands in Hacienda Luisita. To be precise, these lands became
subject of the agrarian reform coverage through the stock distribution
scheme only upon the approval of the SDP, that is, November 21, 1989.
Thus, such approval is akin to a notice of coverage ordinarily issued
under compulsory acquisition. Further, any doubt should be resolved in
favor of the FWBs. As this Court held in Perez-Rosario v. CA:

It is an established social and economic fact that the
escalation of poverty is the driving force behind the political
disturbances that have in the past compromised the peace and
security of the people as well as the continuity of the national
order. To subdue these acute disturbances, the legislature over the
course of the history of the nation passed a series of laws
calculated to accelerate agrarian reform, ultimately to raise the
material standards of living and eliminate discontent. Agrarian
reform is a perceived solution to social instability. The edicts of
social justice found in the Constitution and the public policies that
underwrite them, the extraordinary national experience, and the
prevailing national consciousness, all command the great
departments of government to tilt the balance in favor of the poor
and underprivileged whenever reasonable doubt arises in the
interpretation of the law. But annexed to the great and sacred
charge of protecting the weak is the diametric function to put
every effort to arrive at an equitable solution for all parties
concerned: the jural postulates of social justice cannot shield
illegal acts, nor do they sanction false sympathy towards a certain
class, nor yet should they deny justice to the landowner whenever
truth and justice happen to be on her side. In the occupation of the
legal questions in all agrarian disputes whose outcomes can
significantly affect societal harmony, the considerations of social
advantage must be weighed, an inquiry into the prevailing social
interests is necessary in the adjustment of conflicting demands
and expectations of the people, and the social interdependence of
these interests, recognized. (Emphasis and citations omitted.)


Considering that the issue on just compensation has already been passed
upon and denied by the Court in its November 22, 2011 Resolution, a subsequent
motion touching on the same issue undeniably partakes of a second motion for
reconsideration, hence, a prohibited pleading, and as such, the motion or plea must
be denied. Sec. 3 of Rule 15 of the Internal Rules of the Supreme Court is clear:

SEC. 3. Second motion for reconsideration. The Court shall not
entertain a second motion for reconsideration, and any exception to this
rule can only be granted in the higher interest of justice by the Court en
banc upon a vote of at least two-thirds of its actual membership. There is
reconsideration in the higher interest of justice when the assailed
decision is not only legally erroneous, but is likewise patently unjust and
potentially capable of causing unwarranted and irremediable injury or
damage to the parties. A second motion for reconsideration can only be
entertained before the ruling sought to be reconsidered becomes final by
operation of law or by the Courts declaration.

In the Division, a vote of three Members shall be required to
elevate a second motion for reconsideration to the Court En Banc.


Nonetheless, even if we entertain said motion and examine the arguments
raised by HLI and Mallari, et al. one last time, the result will be the same.

Sec. 4, Article XIII of the 1987 Constitution expressly provides that the
taking of land for use in the agrarian reform program of the government is
conditioned on the payment of just compensation. As stated:

Section 4. The State shall, by law, undertake an agrarian
reform program founded on the right of farmers and regular farm
workers, who are landless, to own directly or collectively the lands they
till or, in the case of other farm workers, to receive a just share of the
fruits thereof. To this end, the State shall encourage and undertake the
just distribution of all agricultural lands, subject to such priorities and
reasonable retention limits as the Congress may prescribe, taking into
account ecological, developmental, or equity considerations, and subject
to the payment of just compensation. (Emphasis supplied.)


Just compensation has been defined as the full and fair equivalent of the
property taken from its owner by the expropriator.
[12]
The measure is not the
takers gain, but the owners loss.
[13]
In determining just compensation, the price or
value of the property at the time it was taken from the owner and appropriated by
the government shall be the basis. If the government takes possession of the land
before the institution of expropriation proceedings, the value should be fixed as of
the time of the taking of said possession, not of the filing of the complaint.
[14]


In Land Bank of the Philippines v. Livioco, the Court held that the time of
taking is the time when the landowner was deprived of the use and benefit of his
property, such as when title is transferred to the Republic.
[15]
It should be noted,
however, that taking does not only take place upon the issuance of title either in
the name of the Republic or the beneficiaries of the Comprehensive Agrarian
Reform Program (CARP). Taking also occurs when agricultural lands are
voluntarily offered by a landowner and approved by PARC for CARP coverage
through the stock distribution scheme, as in the instant case. Thus, HLIs
submitting its SDP for approval is an acknowledgment on its part that the
agricultural lands of Hacienda Luisita are covered by CARP. However, it was the
PARC approval which should be considered as the effective date of taking as it
was only during this time that the government officially confirmed the CARP
coverage of these lands.

Indeed, stock distribution option and compulsory land acquisition are two
(2) different modalities under the agrarian reform program. Nonetheless, both
share the same end goal, that is, to have a more equitable distribution and
ownership of land, with due regard to the rights of landowners to just
compensation.
[16]


The fact that Sec. 31 of Republic Act No. 6657 (RA 6657) gives corporate
landowners the option to give qualified beneficiaries the right to avail of a stock
distribution or, in the phraseology of the law, the right to purchase such
proportion of the capital stock of the corporation that the agricultural land, actually
devoted to agricultural activities, bears in relation to the companys total assets,
does not detract from the avowed policy of the agrarian reform law of equitably
distributing ownership of land. The difference lies in the fact that instead of
actually distributing the agricultural lands to the farmer-beneficiaries, these lands
are held by the corporation as part of the capital contribution of the farmer-
beneficiaries, not of the landowners, under the stock distribution scheme. The end
goal of equitably distributing ownership of land is, therefore, undeniable. And
since it is only upon the approval of the SDP that the agricultural lands actually
came under CARP coverage, such approval operates and takes the place of a notice
of coverage ordinarily issued under compulsory acquisition.

Moreover, precisely because due regard is given to the rights of landowners
to just compensation, the law on stock distribution option acknowledges that
landowners can require payment for the shares of stock corresponding to the value
of the agricultural lands in relation to the outstanding capital stock of the
corporation.

Although Tadeco did not require compensation for the shares of stock
corresponding to the value of the agricultural lands in relation to the outstanding
capital stock of HLI, its inability to receive compensation cannot be attributed to
the government. The second paragraph of Sec. 31 of RA 6657 explicitly states that
[u]pon certification by DAR, corporations owning agricultural lands may give
their qualified beneficiaries the right to purchase such proportion of the capital
stock of the corporation that the agricultural land, actually devoted to agricultural
activities, bears in relation to the companys total assets, under such terms and
conditions as may be agreed upon by them. x x x
[17]
On the basis of this statutory
provision, Tadeco could have exacted payment for such shares of stock
corresponding to the value of the agricultural lands of Hacienda Luisita in relation
to the outstanding capital stock of HLI, but it did not do so.

What is notable, however, is that the divestment by Tadeco of the
agricultural lands of Hacienda Luisita and the giving of the shares of stock for free
is nothing but an enticement or incentive for the FWBs to agree with the stock
distribution option scheme and not further push for land distribution. And the
stubborn fact is that the man days scheme of HLI impelled the FWBs to work in
the hacienda in exchange for such shares of stock.
Notwithstanding the foregoing considerations, the suggestion that there is
taking only when the landowner is deprived of the use and benefit of his
property is not incompatible with Our conclusion that taking took place on
November 21, 1989. As mentioned in Our July 5, 2011 Decision, even from the
start, the stock distribution scheme appeared to be Tadecos preferred option in
complying with the CARP when it organized HLI as its spin-off corporation in
order to facilitate stock acquisition by the FWBs. For this purpose, Tadeco
assigned and conveyed to HLI the agricultural lands of Hacienda Luisita, set at
4,915.75 hectares, among others. These agricultural lands constituted as the capital
contribution of the FWBs in HLI. In effect, Tadeco deprived itself of the
ownership over these lands when it transferred the same to HLI.

While it is true that Tadeco has majority control over HLI, the Court cannot
subscribe to the view Mallari, et al. espouse that, on the basis of such majority
stockholding, Tadeco was never deprived of the use and benefit of the agricultural
lands of Hacienda Luisita it divested itself in favor of HLI.

It bears stressing that [o]wnership is defined as a relation in law by virtue
of which a thing pertaining to one person is completely subjected to his will in
everything not prohibited by law or the concurrence with the rights of
another.
[18]
The attributes of ownership are: jus utendi or the right to possess and
enjoy, jus fruendi or the right to the fruits, jus abutendi or the right to abuse or
consume, jus disponendi or the right to dispose or alienate, and jus vindicandi or
the right to recover or vindicate.
[19]


When the agricultural lands of Hacienda Luisita were transferred by Tadeco
to HLI in order to comply with CARP through the stock distribution option
scheme, sealed with the imprimatur of PARC under PARC Resolution No. 89-12-2
dated November 21, 1989, Tadeco was consequently dispossessed of the afore-
mentioned attributes of ownership. Notably, Tadeco and HLI are two different
entities with separate and distinct legal personalities. Ownership by one cannot be
considered as ownership by the other.

Corollarily, it is the official act by the government, that is, the PARCs
approval of the SDP, which should be considered as the reckoning point for the
taking of the agricultural lands of Hacienda Luisita. Although the transfer of
ownership over the agricultural lands was made prior to the SDPs approval, it is
this Courts consistent view that these lands officially became subject of the
agrarian reform coverage through the stock distribution scheme only upon the
approval of the SDP. And as We have mentioned in Our November 22, 2011
Resolution, such approval is akin to a notice of coverage ordinarily issued under
compulsory acquisition.

Further, if We adhere to HLIs view that the Notice of Coverage issued on
January 2, 2006 should, at the very least, be considered as the date of taking as
this was the only time that the agricultural portion of the hacienda was placed
under compulsory acquisition in view of HLIs failure to perform certain
obligations under the SDP, this Court would, in effect, be penalizing the qualified
FWBs twice for acceding to the adoption of the stock distribution scheme: first, by
depriving the qualified FWBs of the agricultural lands that they should have gotten
early on were it not for the adoption of the stock distribution scheme of which they
only became minority stockholders; and second, by making them pay higher
amortizations for the agricultural lands that should have been given to them
decades ago at a much lower cost were it not for the landowners initiative of
adopting the stock distribution scheme for free.

Reiterating what We already mentioned in Our November 22, 2011
Resolution, [e]ven if it is the government which will pay the just compensation to
HLI, this will also affect the FWBs as they will be paying higher amortizations to
the government if the taking will be considered to have taken place only on
January 2, 2006. As aptly observed by Justice Leonardo-De Castro in her
Concurring Opinion, this will put the land beyond the capacity of the [FWBs] to
pay, which this Court should not countenance.

Considering the above findings, it cannot be gainsaid that effective taking
took place in the case at bar upon the approval of the SDP, that is, on November
21, 1989.

HLI postulates that just compensation is a question of fact that should be left
to the determination by the DAR, Land Bank of the Philippines (LBP) or even the
special agrarian court (SAC).
[20]
As a matter of fact, the Court, in its November 22,
2011 Resolution, dispositively ordered the DAR and the LBP to determine the
compensation due to HLI. And as indicated in the body of said Resolution:

The foregoing notwithstanding, it bears stressing that the DARs
land valuation is only preliminary and is not, by any means, final and
conclusive upon the landowner. The landowner can file an original
action with the RTC acting as a special agrarian court to determine just
compensation. The court has the right to review with finality the
determination in the exercise of what is admittedly a judicial function.


As regards the issue on when taking occurred with respect to the
agricultural lands in question, We, however, maintain that this Court can rule, as it
has in fact already ruled on its reckoning date, that is, November 21, 1989, the date
of issuance of PARC Resolution No. 89-12-2, based on the above-mentioned
disquisitions. The investment on SACs of original and exclusive jurisdiction over
all petitions for the determination of just compensation to landowners
[21]
will not
preclude the Court from ruling upon a matter that may already be resolved based
on the records before Us. By analogy, Our ruling in Heirs of Dr. Jose Deleste v.
LBP is applicable:

Indeed, it is the Office of the DAR Secretary which is vested with
the primary and exclusive jurisdiction over all matters involving the
implementation of the agrarian reform program.However, this will not
prevent the Court from assuming jurisdiction over the petition
considering that the issues raised in it may already be resolved on
the basis of the records before Us. Besides, to allow the matter to
remain with the Office of the DAR Secretary would only cause
unnecessary delay and undue hardship on the parties. Applicable, by
analogy, is Our ruling in the recent Bagong Pagkakaisa ng Manggagawa
ng Triumph International v. Department of Labor and Employment
Secretary, where We held:

But as the CA did, we similarly recognize that undue
hardship, to the point of injustice, would result if a remand would
be ordered under a situation where we are in the position to
resolve the case based on the records before us. As we said
in Roman Catholic Archbishop of Manila v. Court of Appeals:

[w]e have laid down the rule that the remand of the case to
the lower court for further reception of evidence is not necessary
where the Court is in a position to resolve the dispute based on the
records before it. On many occasions, the Court, in the public
interest and for the expeditious administration of justice, has
resolved actions on the merits instead of remanding them to the
trial court for further proceedings, such as where the ends of
justice, would not be subserved by the remand of the
case.
[22]
(Emphasis supplied; citations omitted.)


Even though the compensation due to HLI will still be preliminarily
determined by DAR and LBP, subject to review by the RTC acting as a SAC, the
fact that the reckoning point of taking is already fixed at a certain date should
already hasten the proceedings and not further cause undue hardship on the parties,
especially the qualified FWBs.

By a vote of 8-6, the Court affirmed its ruling that the date of taking in
determining just compensation is November 21, 1989 when PARC approved HLIs
stock option plan.

As regards the issue of interest on just compensation, We also leave this
matter to the DAR and the LBP, subject to review by the RTC acting as a SAC.

Option will not ensure
control over agricultural lands

In Our November 22, 2011 Resolution, this Court held:
After having discussed and considered the different contentions
raised by the parties in their respective motions, We are now left to
contend with one crucial issue in the case at bar, that is, control over the
agricultural lands by the qualified FWBs.

Upon a review of the facts and circumstances, We realize that the
FWBs will never have control over these agricultural lands for as long as
they remain as stockholders of HLI. In Our July 5, 2011 Decision, this
Court made the following observations:

There is, thus, nothing unconstitutional in the formula
prescribed by RA 6657. The policy on agrarian reform is that
control over the agricultural land must always be in the hands
of the farmers. Then it falls on the shoulders of DAR and PARC
to see to it the farmers should always own majority of the
common shares entitled to elect the members of the board of
directors to ensure that the farmers will have a clear majority in
the board. Before the SDP is approved, strict scrutiny of the
proposed SDP must always be undertaken by the DAR and
PARC, such that the value of the agricultural land contributed to
the corporation must always be more than 50% of the total assets
of the corporation to ensure that the majority of the members of
the board of directors are composed of the farmers. The PARC
composed of the President of the Philippines and cabinet
secretaries must see to it that control over the board of directors
rests with the farmers by rejecting the inclusion of non-
agricultural assets which will yield the majority in the board of
directors to non-farmers. Any deviation, however, by PARC or
DAR from the correct application of the formula prescribed by the
second paragraph of Sec. 31 of RA 6675 does not make said
provision constitutionally infirm. Rather, it is the application of
said provision that can be challenged. Ergo, Sec. 31 of RA 6657
does not trench on the constitutional policy of ensuring control by
the farmers.

In line with Our finding that control over agricultural lands must
always be in the hands of the farmers, We reconsider our ruling that the
qualified FWBs should be given an option to remain as stockholders of
HLI, inasmuch as these qualified FWBs will never gain control given the
present proportion of shareholdings in HLI.

A revisit of HLIs Proposal for Stock Distribution under CARP
and the Stock Distribution Option Agreement (SDOA) upon which the
proposal was based reveals that the total assets of HLI is PhP
590,554,220, while the value of the 4,915.7466 hectares is PhP
196,630,000. Consequently, the share of the farmer-beneficiaries in the
HLI capital stock is 33.296% (196,630,000 divided by 590,554.220);
118,391,976.85 HLI shares represent 33.296%. Thus, even if all the
holders of the 118,391,976.85 HLI shares unanimously vote to remain as
HLI stockholders, which is unlikely, control will never be placed in the
hands of the farmer-beneficiaries. Control, of course, means the
majority of 50% plus at least one share of the common shares and other
voting shares. Applying the formula to the HLI stockholdings, the
number of shares that will constitute the majority is 295,112,101 shares
(590,554,220 divided by 2 plus one [1] HLI share). The 118,391,976.85
shares subject to the SDP approved by PARC substantially fall short of
the 295,112,101 shares needed by the FWBs to acquire control over
HLI. Hence, control can NEVER be attained by the FWBs. There is
even no assurance that 100% of the 118,391,976.85 shares issued to the
FWBs will all be voted in favor of staying in HLI, taking into account
the previous referendum among the farmers where said shares were not
voted unanimously in favor of retaining the SDP. In light of the
foregoing consideration, the option to remain in HLI granted to the
individual FWBs will have to be recalled and revoked.

Moreover, bearing in mind that with the revocation of the
approval of the SDP, HLI will no longer be operating under SDP and
will only be treated as an ordinary private corporation; the FWBs who
remain as stockholders of HLI will be treated as ordinary stockholders
and will no longer be under the protective mantle of RA 6657.
(Emphasis in the original.)


HLI, however, takes exception to the above-mentioned ruling and contends
that [t]here is nothing in the Constitution nor in the agrarian laws which require
that control over the agricultural lands must always be in the hands of the
farmers.
[23]
Moreover, both HLI and Mallari, et al. claim that the option given to
the qualified FWBs to remain as stockholders of HLI is neither iniquitous nor
prejudicial to the FWBs.
[24]


The Court agrees that the option given to the qualified FWBs whether to
remain as stockholders of HLI or opt for land distribution is neither iniquitous nor
prejudicial to the FWBs. Nonetheless, the Court is not unmindful of the policy on
agrarian reform that control over the agricultural land must always be in the hands
of the farmers. Contrary to the stance of HLI, both the Constitution and RA 6657
intended the farmers, individually or collectively, to have control over the
agricultural lands of HLI; otherwise, all these rhetoric about agrarian reform will
be rendered for naught. Sec. 4, Art. XIII of the 1987 Constitution provides:

Section 4. The State shall, by law, undertake an agrarian reform
program founded on the right of farmers and regular farmworkers
who are landless, to own directly or collectively the lands they till or,
in the case of other farmworkers, to receive a just share of the fruits
thereof. To this end, the State shall encourage and undertake the just
distribution of all agricultural lands, subject to such priorities and
reasonable retention limits as the Congress may prescribe, taking into
account ecological, developmental, or equity considerations, and subject
to the payment of just compensation. In determining retention limits, the
State shall respect the right of small landowners. The State shall further
provide incentives for voluntary land-sharing. (Emphasis supplied.)


Pursuant to and as a mechanism to carry out the above-mentioned
constitutional directive, RA 6657 was enacted. In consonance with the
constitutional policy on agrarian reform, Sec. 2 of RA 6657 also states:

SECTION 2. Declaration of Principles and Policies. - It is the
policy of the State to pursue a Comprehensive Agrarian Reform Program
(CARP). The welfare of the landless farmers and farm workers will
receive the highest consideration to promote social justice and to move
the nation towards sound rural development and industrialization, and
the establishment of owner cultivatorship of economic-sized farms as the
basis of Philippine agriculture.

To this end, a more equitable distribution and ownership of land,
with due regard to the rights of landowners to just compensation and to
the ecological needs of the nation, shall be undertaken to provide farmers
and farm workers with the opportunity to enhance their dignity and
improve the quality of their lives through greater productivity of
agricultural lands.

The agrarian reform program is founded on the right of
farmers and regular farm workers, who are landless, to own directly
or collectively the lands they till or, in the case of other farm
workers, to receive a share of the fruits thereof. To this end, the State
shall encourage the just distribution of all agricultural lands, subject to
the priorities and retention limits set forth in this Act, having taken into
account ecological, developmental, and equity considerations, and
subject to the payment of just compensation. The State shall respect the
right of small landowners and shall provide incentives for voluntary
land-sharing.

The State shall recognize the right of farmers, farm workers and
landowners, as well as cooperatives and other independent farmers
organization, to participate in the planning, organization, and
management of the program, and shall provide support to agriculture
through appropriate technology and research, and adequate financial,
production, marketing and other support services.

The State shall apply the principles of agrarian reform or
stewardship, whenever applicable, in accordance with law, in the
disposition or utilization of other natural resources, including lands of
the public domain, under lease or concession, suitable to agriculture,
subject to prior rights, homestead rights of small settlers and the rights of
indigenous communities to their ancestral lands.

The State may resettle landless farmers and farm workers in its
own agricultural estates, which shall be distributed to them in the manner
provided by law.

By means of appropriate incentives, the State shall encourage the
formation and maintenance of economic-sized family farms to be
constituted by individual beneficiaries and small landowners.

The State shall protect the rights of subsistence fishermen,
especially of local communities, to the preferential use of communal
marine and fishing resources, both inland and offshore. It shall provide
support to such fishermen through appropriate technology and research,
adequate financial, production and marketing assistance and other
services, The State shall also protect, develop and conserve such
resources. The protection shall extend to offshore fishing grounds of
subsistence fishermen against foreign intrusion. Fishworkers shall
receive a just share from their labor in the utilization of marine and
fishing resources.

The State shall be guided by the principles that land has a social
function and land ownership has a social responsibility. Owners of
agricultural land have the obligation to cultivate directly or through labor
administration the lands they own and thereby make the land productive.

The State shall provide incentives to landowners to invest the
proceeds of the agrarian reform program to promote industrialization,
employment and privatization of public sector enterprises. Financial
instruments used as payment for lands shall contain features that shall
enhance negotiability and acceptability in the marketplace.

The State may lease undeveloped lands of the public domain to
qualified entities for the development of capital-intensive farms,
traditional and pioneering crops especially those for exports subject to
the prior rights of the beneficiaries under this Act. (Emphasis supplied.)


Based on the above-quoted provisions, the notion of farmers and regular
farmworkers having the right to own directly or collectively the lands they till is
abundantly clear. We have extensively discussed this ideal in Our July 5, 2011
Decision:

The wording of the provision is unequivocal the farmers and
regular farmworkers have a right TO OWN DIRECTLY OR
COLLECTIVELY THE LANDS THEY TILL. The basic law allows
two (2) modes of land distributiondirect and indirect
ownership. Direct transfer to individual farmers is the most commonly
used method by DAR and widely accepted. Indirect transfer through
collective ownership of the agricultural land is the alternative to direct
ownership of agricultural land by individual farmers. The aforequoted
Sec. 4 EXPRESSLY authorizes collective ownership by farmers. No
language can be found in the 1987 Constitution that disqualifies or
prohibits corporations or cooperatives of farmers from being the legal
entity through which collective ownership can be exercised. The word
collective is defined as indicating a number of persons or things
considered as constituting one group or aggregate, while collectively
is defined as in a collective sense or manner; in a mass or body. By
using the word collectively, the Constitution allows for indirect
ownership of land and not just outright agricultural land transfer. This is
in recognition of the fact that land reform may become successful even if
it is done through the medium of juridical entities composed of farmers.

Collective ownership is permitted in two (2) provisions of RA
6657. Its Sec. 29 allows workers cooperatives or associations to
collectively own the land, while the second paragraph of Sec. 31 allows
corporations or associations to own agricultural land with the farmers
becoming stockholders or members. Said provisions read:

SEC. 29. Farms owned or operated by corporations or
other business associations.In the case of farms owned or
operated by corporations or other business associations, the
following rules shall be observed by the PARC.

In general, lands shall be distributed directly to the
individual worker-beneficiaries.

In case it is not economically feasible and sound to divide
the land, then it shall be owned collectively by the worker
beneficiaries who shall form a workers cooperative or
association which will deal with the corporation or business
association. x x x

SEC. 31. Corporate Landowners. x x x

x x x x

Upon certification by the DAR, corporations owning
agricultural lands may give their qualified beneficiaries the right
to purchase such proportion of the capital stock of
thecorporation that the agricultural land, actually devoted to
agricultural activities, bears in relation to the companys total
assets, under such terms and conditions as may be agreed upon by
them. In no case shall the compensation received by the workers
at the time the shares of stocks are distributed be reduced. The
same principle shall be applied to associations, with respect to
their equity or participation. x x x

Clearly, workers cooperatives or associations under Sec. 29 of
RA 6657 and corporations or associations under the succeeding Sec. 31,
as differentiated from individual farmers, are authorized vehicles for the
collective ownership of agricultural land. Cooperatives can be registered
with the Cooperative Development Authority and acquire legal
personality of their own, while corporations are juridical persons under
the Corporation Code. Thus, Sec. 31 is constitutional as it simply
implements Sec. 4 of Art. XIII of the Constitution that land can be
owned COLLECTIVELY by farmers. Even the framers of the l987
Constitution are in unison with respect to the two (2) modes of
ownership of agricultural lands tilled by farmersDIRECT and
COLLECTIVE, thus:

MR. NOLLEDO. And when we talk of the phrase to
own directly, we mean the principle of direct ownership by the
tiller?

MR. MONSOD. Yes.

MR. NOLLEDO. And when we talk of collectively, we mean
communal ownership, stewardship or State ownership?

MS. NIEVA. In this section, we conceive of cooperatives; that is
farmers cooperatives owning the land, not the State.
MR. NOLLEDO. And when we talk of collectively, referring to
farmers cooperatives, do the farmers own specific areas of land
where they only unite in their efforts?

MS. NIEVA. That is one way.

MR. NOLLEDO. Because I understand that there are two basic
systems involved: the moshave type of agriculture and the
kibbutz. So are both contemplated in the report?

MR. TADEO. Ang dalawa kasing pamamaraan ng
pagpapatupad ng tunay na reporma sa lupa ay ang
pagmamay-ari ng lupa na hahatiin sa individual na
pagmamay-ari directly at ang tinatawag na sama-samang
gagawin ng mga magbubukid. Tulad sa Negros, ang gusto ng
mga magbubukid ay gawin nila itong cooperative or collective
farm. Ang ibig sabihin ay sama-sama nilang sasakahin.

x x x x

MR. TINGSON. x x x When we speak here of to own directly or
collectively the lands they till, is this land for the tillers rather
than land for the landless? Before, we used to hear land for the
landless, but now the slogan is land for the tillers. Is that right?

MR. TADEO. Ang prinsipyong umiiral dito ay iyong land for the
tillers. Ang ibig sabihin ng directly ay tulad sa
implementasyon sa rice and corn lands kung saan inaari na ng
mga magsasaka ang lupang binubungkal nila. Ang ibig
sabihin naman ng collectively ay sama-samang paggawa sa
isang lupain o isang bukid, katulad ng sitwasyon saNegros.

As Commissioner Tadeo explained, the farmers will work on the
agricultural land sama-sama or collectively. Thus, the main requisite
for collective ownership of land is collective or group work by farmers
of the agricultural land. Irrespective of whether the landowner is a
cooperative, association or corporation composed of farmers, as long as
concerted group work by the farmers on the land is present, then it falls
within the ambit of collective ownership scheme. (Emphasis in the
original; underscoring supplied.)


As aforequoted, there is collective ownership as long as there is a concerted
group work by the farmers on the land, regardless of whether the landowner is a
cooperative, association or corporation composed of farmers. However, this
definition of collective ownership should be read in light of the clear policy of the
law on agrarian reform, which is to emancipate the tiller from the bondage of the
soil and empower the common people. Worth noting too is its noble goal of
rectifying the acute imbalance in the distribution of this precious resource among
our people.
[25]
Accordingly, HLIs insistent view that control need not be in the
hands of the farmers translates to allowing it to run roughshod against the very
reason for the enactment of agrarian reform laws and leave the farmers in their
shackles with sheer lip service to look forward to.

Notably, it has been this Courts consistent stand that control over the
agricultural land must always be in the hands of the farmers. As We wrote in Our
July 5, 2011 Decision:

There is, thus, nothing unconstitutional in the formula prescribed
by RA 6657. The policy on agrarian reform is that control over the
agricultural land must always be in the hands of the farmers. Then
it falls on the shoulders of DAR and PARC to see to it the farmers
should always own majority of the common shares entitled to elect the
members of the board of directors to ensure that the farmers will have a
clear majority in the board. Before the SDP is approved, strict scrutiny
of the proposed SDP must always be undertaken by the DAR and PARC,
such that the value of the agricultural land contributed to the corporation
must always be more than 50% of the total assets of the corporation to
ensure that the majority of the members of the board of directors are
composed of the farmers. The PARC composed of the President of
the Philippines and cabinet secretaries must see to it that control
over the board of directors rests with the farmers by rejecting the
inclusion of non-agricultural assets which will yield the majority in
the board of directors to non-farmers. Any deviation, however, by
PARC or DAR from the correct application of the formula
prescribed by the second paragraph of Sec. 31 of RA 6675 does not
make said provision constitutionally infirm. Rather, it is the
application of said provision that can be challenged. Ergo, Sec. 31 of
RA 6657 does not trench on the constitutional policy of ensuring control
by the farmers. (Emphasis supplied.)


There is an aphorism that what has been done can no longer be undone.
That may be true, but not in this case. The SDP was approved by PARC even if the
qualified FWBs did not and will not have majority stockholdings in HLI, contrary
to the obvious policy by the government on agrarian reform. Such an adverse
situation for the FWBs will not and should not be permitted to stand. For this
reason, We maintain Our ruling that the qualified FWBs will no longer have the
option to remain as stockholders of HLI.
FWBs Entitled
to Proceeds of Sale


HLI reiterates its claim over the proceeds of the sales of the 500 hectares and
80.51 hectares of the land as corporate owner and argues that the return of said
proceeds to the FWBs is unfair and violative of the Corporation Code.

This claim is bereft of merit.

It cannot be denied that the adverted 500-hectare converted land and the
SCTEX lot once formed part of what would have been agrarian-distributable lands,
in fine subject to compulsory CARP coverage. And, as stated in our July 5, 2011
Decision, were it not for the approval of the SDP by PARC, these large parcels of
land would have been distributed and ownership transferred to the FWBs, subject
to payment of just compensation, given that, as of 1989, the subject 4,915 hectares
of Hacienda Luisita were already covered by CARP. Accordingly, the proceeds
realized from the sale and/or disposition thereof should accrue for the benefit of the
FWBs, less deductions of the 3% of the proceeds of said transfers that were paid to
the FWBs, the taxes and expenses relating to the transfer of titles to the transferees,
and the expenditures incurred by HLI and Centennary Holdings, Inc. for legitimate
corporate purposes, as prescribed in our November 22, 2011 Resolution.

Homelots

In the present recourse, HLI also harps on the fact that since the homelots
given to the FWBs do not form part of the 4,915.75 hectares covered by the SDP,
then the value of these homelots should, with the revocation of the SDP, be paid to
Tadeco as the landowner.
[26]


We disagree. As We have explained in Our July 5, 2011 Decision, the
distribution of homelots is required under RA 6657 only for corporations or
business associations owning or operating farms which opted for land distribution.
This is provided under Sec. 30 of RA 6657. Particularly:

SEC. 30. Homelots and Farmlots for Members of
Cooperatives. The individual members of the cooperatives or
corporations mentioned in the preceding section shall be provided with
homelots and small farmlots for their family use, to be taken from the
land owned by the cooperative or corporation. (Italics supplied.)


The preceding section referred to in the above-quoted provision is Sec. 29
of RA 6657, which states:

SEC. 29. Farms Owned or Operated by Corporations or Other
Business Associations.In the case of farms owned or operated by
corporations or other business associations, the following rules shall be
observed by the PARC.

In general, lands shall be distributed directly to the individual
worker-beneficiaries.

In case it is not economically feasible and sound to divide the
land, then it shall be owned collectively by the worker-beneficiaries who
shall form a workers cooperative or association which will deal with the
corporation or business association. Until a new agreement is entered
into by and between the workers cooperative or association and the
corporation or business association, any agreement existing at the time
this Act takes effect between the former and the previous landowner
shall be respected by both the workers cooperative or association and
the corporation or business association.


Since none of the above-quoted provisions made reference to corporations
which opted for stock distribution under Sec. 31 of RA 6657, then it is apparent
that said corporations are not obliged to provide for homelots. Nonetheless, HLI
undertook to subdivide and allocate for free and without charge among the
qualified family-beneficiaries x x x residential or homelots of not more than 240
sq. m. each, with each family beneficiary being assured of receiving and owning a
homelot in the barrio or barangay where it actually resides. In fact, HLI was able
to distribute homelots to some if not all of the FWBs. Thus, in our November 22,
2011 Resolution, We declared that the homelots already received by the FWBs
shall be respected with no obligation to refund or to return them.
The Court, by a unanimous vote, resolved to maintain its ruling that the
FWBs shall retain ownership of the homelots given to them with no obligation to
pay for the value of said lots. However, since the SDP was already revoked with
finality, the Court directs the government through the DAR to pay HLI the just
compensation for said homelots in consonance with Sec. 4, Article XIII of the
1987 Constitution that the taking of land for use in the agrarian reform program is
subject to the payment of just compensation. Just compensation should be paid
to HLI instead of Tadeco in view of the Deed of Assignment and Conveyance
dated March 22, 1989 executed between Tadeco and HLI, where Tadeco
transferred and conveyed to HLI the titles over the lots in question. DAR is ordered
to compute the just compensation of the homelots in accordance with existing
laws, rules and regulations.

To recapitulate, the Court voted on the following issues in this manner:

1. In determining the date of taking, the Court voted 8-6 to maintain
the ruling fixing November 21, 1989 as the date of taking, the value
of the affected lands to be determined by the LBP and the DAR;

2. On the propriety of the revocation of the option of the FWBs to
remain as HLI stockholders, the Court, by unanimous vote, agreed to
reiterate its ruling in its November 22, 2011 Resolution that the option
granted to the FWBs stays revoked;

3. On the propriety of returning to the FWBs the proceeds of the sale of
the 500-hectare converted land and of the 80.51-hectare SCTEX land,
the Court unanimously voted to maintain its ruling to order the
payment of the proceeds of the sale of the said land to the FWBs less
the 3% share, taxes and expenses specified in the falloof the
November 22, 2011 Resolution;

4. On the payment of just compensation for the homelots to HLI, the
Court, by unanimous vote, resolved to amend its July 5, 2011
Decision and November 22, 2011 Resolution by ordering the
government, through the DAR, to pay to HLI the just compensation
for the homelots thus distributed to the FWBS.

WHEREFORE, the Motion to Clarify and Reconsider Resolution of
November 22, 2011 dated December 16, 2011 filed by petitioner Hacienda Luisita,
Inc. and theMotion for Reconsideration/Clarification dated December 9, 2011 filed
by private respondents Noel Mallari, Julio Suniga, Supervisory Group of Hacienda
Luisita, Inc. and Windsor Andaya are hereby DENIED with this qualification: the
July 5, 2011 Decision, as modified by the November 22, 2011 Resolution,
is FURTHER MODIFIED in that the government, through DAR, is ordered to
pay Hacienda Luisita, Inc. the just compensation for the 240-square meter
homelots distributed to the FWBs.

The July 5, 2011 Decision, as modified by the November 22, 2011
Resolution and further modified by this Resolution is
declared FINAL and EXECUTORY. The entry of judgment of said decision
shall be made upon the time of the promulgation of this Resolution.

No further pleadings shall be entertained in this case.

SO ORDERED.